08-08-2026: The fuel excise is one of the oldest taxes in Australia, dating back to federation in 1901. It is a Commonwealth tax charged on petrol, diesel and many other liquid fuels. It creates revenue for the federal government for spending on services, though not necessarily on roads. The current federal government, in response to the unprovoked US/Israeli war on Iran on February 28, reduced the fuel excise from 52.6 cents per litre to 20.6 cents per litre between the 1st of April and the 30th of June. This temporary relief, which brought down fuel prices, ended on the 2nd of August.[1] Now, fuel prices have once again started to rise to around 2 dollars a litre for petrol, and around 2.5 dollars a litre for diesel. As the failing US war on Iran drags on, and drags other Middle East states reluctantly in, fuel prices are expected to rise even further. Higher fuel costs affect almost all businesses as the transport costs are passed on to working people through higher prices for food, construction materials and other goods.
Strait of Hormuz and Red Sea closed
To avert an economic collapse the Australian government not only temporarily reduced the fuel excise, it took measures to import jet fuel and fertiliser,[2] which were in short supply due to the closure of the Strait of Hormuz. Some of these fuel supplies came from the People’s Republic of China (PRC), which is ironic considering that China is widely suspected to be the ultimate target of the US imperialist war on Iran. The act of the Islamic Republic of Iran closing the Strait of Hormuz, which traverses the Persian Gulf, was a masterstroke in asymmetric warfare. Iran was aware of the dependency of the Western economies on Gulf oil and used the closure of the Strait of Hormuz as leverage against the US empire waging a criminal war against it. Now, the US government has either encouraged or ordered Saudi Arabia to effectively re-start its war on Yemen, to spread a war on Iran it is losing. In response, the Ansar Allah (“Houthi”) government has in turn effectively closed the Bab el-Mandeb, which is one end of the Red Sea. This is aimed at the Saudi kingdom, but it could well impede 60% of Middle East oil exports.[3] With both the Strait of Hormuz and the Red Sea effectively closed, a Western economic depression is again likely.
Australia’s economy is one of the most heavily dependent on diesel fuel in the world. Yet over the last 35 years, neoliberal capitalism meant the closure of almost all of the oil refineries, with only two still operating. The socialistic PRC, on the other hand, is leading the charge away from reliance on oil and towards electric power fed by low or zero carbon energy sources. Partially to deal with a heavy pollution problem, and partially to develop a key industry, the PRC gives heavy state subsidies to its domestic EV (electric vehicle) industry. In a fuel crisis ignited by the US war on Iran, the best option for economies to keep running is to use EVs for transport, whether cars or trucks or buses. By virtue of its workers’ state, however deformed, the PRC is well placed to sustain and even advance production while the rest of the world is waiting for oil imports. The PRC has effectively created the world’s first “electrostate”, as in January it surpassed the generation of 10 trillion kWh (kilowatt hours) of electricity. This is double what is generated in the US and more than the combined electric power consumption of the European Union (EU), Russia, India and Japan. This could scarcely have been achieved without its planned economy.
Link the cost of living to the danger of war
Flatlining Australian capitalism is far from able to transition to electric power at this stage, though EVs produced in China are assisting, given that Australia’s domestic vehicle making industry was shuttered over ten years ago. Right now, working people in Australia need affordable fuel as well as a drastically reduced cost of living. Since the Covid reign of terror, the cost of food, rent, housing and utility bills (water, gas, electricity) have skyrocketed to levels which are unaffordable even for some with full-time employment. What is desperately needed is a determined anti-war movement which links the wars the US empire is waging directly to the cost-of-living crisis. It must be explained over and over that the wars overseas and the cost-of-living debacle at home are part of one and the same international conflict. The war on Iran, the war on Russia via Ukraine, and the preparation for war on China are only different theatres of the same war. It is the war of fast fading imperialism against the rising multipolar world.
As Trump’s criminal war becomes a fiasco by virtue of Iran’s formidable counter punching power, the Australian ruling class has distanced itself from the disaster. However, the Australian Labor Party (ALP) federal government was the *first* government in the world to declare its support for the US and Israel when it launched the latest war on Iran on February 28. The previous year, the ALP government expelled the Iranian Ambassador from the country over completely false allegations that Iran was behind an arson attack on a synagogue in Melbourne and damage to a Jewish owned restaurant in Sydney. This discriminatory act was the first time an ambassador had been expelled outside of a war. Following this outrage, it is likely that Australian federal agencies facilitated a false flag incident on Bondi Beach on December 14, 2025. In suspicious circumstances that day, two gunmen allegedly linked to ISIS supposedly gunned down attendees at a Hanukkah celebration while police were slow to act.[4]
It is plausible that the event was staged with the knowledge that a US war on Iran was coming, but the elite knew that a US war on Iran would be extremely unpopular domestically. An extreme “terror attack” was needed in a dire attempt to paint Iran as a maniacal power – which it is evidently not. Unfortunately, the federal government’s efforts with these dire propaganda stunts are augmented by many on the left, which fall for the constant demonisation of Iran in the Western media. There is a deep irony where many self-described leftist and progressive organisations condemn US President Trump ordinarily but then stand with Trump and the mainstream media in denouncing the Iranian “regime”. They do the same with the Russian state and are somewhat muted in relation to warmongering against China – both being supposedly “authoritarian” which supposedly justifies standing to one side.
Workers cannot wait to accommodate cosplaying liberals. We need a vigorous anti-war movement which links all imperialist wars to the dire cost-of-living crisis in the West, so all can see the material reasons for capitalism’s steep decline. Whatever one’s political view of the governments of the Eurasian powers, these states need to be defended against imperialist war. NO TO WAR on IRAN, RUSSIA & CHINA!
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[1] www.thetimes.com.au/australia/51659-fuel-excise-relief-to-end-in-australia (05-08-2026)
[2] www.minister.infrastructure.gov.au/c-king/media-release/albanese-labor-government-helps-secure- (05-08-2026_
[3] www.cryptobriefing.com/houthis-close-bab-el-mandeb-strait-threatening-60-of-middle-east-oil-exports/ (05-08-2026)
[4] http://www.redfireonline.com/2025/12/20/bondi-massacre-does-the-story-add-up/
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